The True State of Development
crisis facing India today (pp 89–106). Not
Rahul Menon
I
n an editorial to commemorate 100
years of the Guardian newspaper in
1921, its editor C P Scott wrote that
“comment is free, but facts are sacred.”
It is the tragedy of the times that com-
ment is no longer free, but increasingly
policed through institutional and non-
institutional means, while the objective
validity of facts is being delegitimised by
ruling governments. A Quantum Leap in
the Wrong Direction? seeks to restore the
sanctity of free comment and objective
facts in public discourse, a vital endeav-
our in today’s political climate.
Every democratic government has the
prerogative to highlight aspects of official
data that present itself in the best possible
light, as long as it allows the opposition to
test the validity of its claims; this is essen-
tial for a healthy functioning of democracy.
This necessitates that data is allowed to cir-
culate freely in the public realm. The prob-
lem is that the current government has
blocked or discontinued the dissemination
of official data, be it the quinquennial sur-
veys of the National Sample Survey Office,
the Periodic Labour Force Surveys, or the
parliamentary report on demonetisation.
Where official data have been released, it
has been criticised by academics for its un-
tenable claims, such as the revised figures of
gross domestic product (GDP) or the claim of
formal sector employment generation us-
ing Provident Fund data. This is inimical to
the exercise of democracy, and has brought
to the fore the “public-good” character of
data, as highlighted by P C Mohanan (2019).
This book serves as a necessary fact-
check on the claims of the Bharatiya Janata
Party (BJP) government that development
has been delivered. Through examination
of publicly available data from a number of
official sources, it critically examines the
promises made by the government in 2014
to see whether they have been achieved.
Across a range of sectors such as employ-
ment, health, education, banking, agricul-
ture, etc, not only has the government
Economic & Political Weekly EPW APRIL 20, 2019
book reviewS
A Quantum Leap in the Wrong Direction? edited
by Rohit Azad, Shouvik Chakraborty, Srinivasan Ramani
and Dipa Sinha, Hyderabad: Orient Blackswan, 2019;
pp 315, `495.
failed to meet its announced objectives, it
has overseen a deterioration in absolute
terms with regard to livelihoods and eco-
nomic performance.
Reduction in Livelihoods
The constantly shifting goalposts of the
government make it difficult to carry out
an easy comparison between the growth
performances of the National Democratic
Alliance-2 and previous governments.
But, an examination of different indica-
tors reveals the hollowness of claims
that the Indian economy is on a sustain-
able high-growth path. The ratios of credit
and exports to GDP have reduced, and the
share of investment in GDP has also fall-
en. This does not square with claims be-
ing made that India is currently experi-
encing its highest ever growth rate. The
agrarian sector is currently experienc-
ing deep distress, as evidenced by falling
output prices and real wages, a cruel
mockery of the promise of doubling
farmers’ incomes. The banking sector is
teetering on the knife-edge of instability,
an outcome that cannot simply be reduced
to the non-performing assets crisis. The
articles by Azad (pp 17–40), Bose and
Dasgupta (pp 41–65), and Banerjee and
Anand (pp 66–88) testify to the multi-
tude of crises facing the Indian economy.
The current problem is not just the
one of deteriorating economic conditions
for already existing livelihoods, but the
vanishing of all forms of livelihoods it-
self. As figures from the leaked Periodic
Labour Force Survey have shown, India
is currently facing the highest unem-
ployment rate ever in 45 years. Subhanil
Chowdhury’s submission in this volume
vol lIV no 16
outlines the magnitude of the employment
only has the unemployment rate risen,
the labour force participation rate has
fallen. This implies that while a greater
number of people are giving up on the
prospects of searching for a job altogether,
this reduction in the number of jobseek-
ers has not benefited those who remain
in the labour market looking for work.
This is in contradiction to the situation
in the United States, where the fall in the
unemployment rate is in some part driven
by the reduction in the number of people
seeking work. The fall in the labour force
participation rate and rising unemploy-
ment are signs of a total collapse in the
ability of the Indian economy to generate
jobs, as can be seen from the extremely
high rates of youth unemployment today.
The tragedy is that the current crisis facing
India has been completely self-inflicted,
through the twin body blows of demoneti-
sation and goods and services tax (GST). This
loss in livelihoods could be counteracted
through an expansion of existing safety nets
such as Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA)
and the public distribution system. How-
ever, the BJP government has elected to
make access to welfare measures even more
difficult, either through curtailing the fund-
ing of MGNREGA, or through the imposition
of Aadhaar. Anmol Somanchi’s contribution
shows how the claims regarding Aadhaar’s
success do not stand up to scrutiny, and the
burden of infrastructural facilities required
for Aadhaar authentication has effectively
translated into a denial of welfare to the
vulnerable population (pp 256–76).
Perverse Formalisation
Ghatak and Mukherjee (2019) have gone
over much the same terrain as this volume
with regard to an analysis of India’s current
economic problems. A close reading of the
articles presented here, however, reveals
an underlying trend that allows one a bet-
ter understanding of the impulses driving
current policymaking. Economic policy
today has been geared towards formali-
sation of an iniquitous and perverse kind.
Rather than transforming the informal sec-
tor, current policy has sought to expand
23
BOOK REVIEW
the formal sector through either a de-
struction of the informal, or through a
worrying retreat of the state.
One of GST’s aims was to expand the
reach of the formal by incentivising
small-scale units to register themselves
as taxpayers. But, the infrastructural
burden it has placed on small-scale pro-
ducers has led to huge problems, for they
are unable to absorb the costs required
to comply with the new administrative
machinery. Demonetisation severely hurt
small enterprises reliant on cash, which is
a majority of the economy, and diverted
purchasing power—what remained after
the withdrawal of currency notes—towards
enterprises already connected with for-
mal digital payment mechanisms. As
Azad has shown, both income and
wealth inequalities have increased over
the last five years (pp 20–22).
The second route towards “formalisa-
tion,” of allowing for corporate entry into
fields primarily reserved for the state, can
be seen in the sectors of health, educa-
tion, and agriculture. The major policy
initiatives of the BJP government in agri-
culture and health betray a similar under-
standing, that public welfare must be
brought about through corporate entry,
whose profits are to be subsidised by the
state. The Pradhan Mantri Fasal Bima
Yojana (PMFBY) and the Ayushman Bharat
scheme both seek to provide welfare
through the problematic sphere of mar-
ket-based insurance schemes. Not only
are these schemes, touted as “game
changers,” merely a rebranding of exist-
ing insurance schemes, their introduction
has serious implications for conceptualis-
ing the changing role of the state with re-
spect to welfare provision.
Arindam Banerjee and Ishan Anand doc-
ument the problems of the PMFBY. Private
insurance companies have registered a
profit of around `6,459 crore in 2016,
while instances of farmers receiving scanty
to no compensation have been reported in
mainstream media. The authors show that
while premiums have increased by nearly
348%, the number of those insured have
risen by 0.4%, indicating an inflation of
profits of the most egregious kind. The
priority given to the Ayushman Bharat
scheme—as argued by Indranil Mukho-
padyay and Dipa Sinha—has led to a fund
24
crunch for schemes such as the National
Health Mission, the Integrated Child Deve-
lopment Services, and even the Ministry of
Women and Child Development (pp 155–
79). The problem with Indian health is
not just about affordability of private
healthcare; it is about the availability of
sound health infrastructure as well, a task
that requires the presence of the state.
While the current discourse around the
state of Indian universities has revolved
around their patriotic credentials—or lack
of it—Ayesha Kidwai highlights a disturb-
ing trend. Universities are now being
forced to move towards a system wherein
they are expected to generate their own
resources through the imposition of user
fees and grants, while the only help af-
forded by the government would come in
the form of loans. This has already led to a
reduction in faculty numbers (p 148), as
well as an increase in the entry of private
institutes (p 143). Under the guise of “effi-
ciency,” this would only imply pushing ed-
ucation further away from the reach of
those who have always been denied it.
As Roshan Kishore argues in a lucid
and insightful essay in this volume, the
BJP government has sought to obfuscate
this marked preference for the operation
of private corporates in the policy sphere
by zealously proclaiming its opposition to
forms of corruption and its desire to do
right by the “common man.” This might
explain why the government undertook
the policy misadventure of demonetisa-
tion, and why the BJP did not face any
immediate electoral backlash, as it was
able to convince voters of its anti-corrup-
tion credentials (p 246). In doing so, the
economic prospects of the current gen-
eration have been mortgaged to pay for
political gains. What this should tell us
is that the current state of the economy
is not the result solely of ill-advised poli-
cy measures, but is the outcome of a spe-
cific ideological lens through which the
government views the world.
Taxation
While the essays in this collection span an
impressive breadth of sectors, one would
have liked to see a chapter examining
claims with respect to taxation, since
many—such as Surjit Bhalla and Arun
Jaitley—have highlighted the increase in
APRIL 20, 2019
taxpayers and increased tax buoyancy as
vindication of the government’s policies.
Rupa Subramanya (2018) has shown how
the supposed successes of the current
government with regard to tax policy are
invalidated once one takes a longer term
view of the data. The high levels of buoy-
ancy currently seen is still below levels
experienced during the early 2000s.
Moreover, tax buoyancy today is mainly
driven by increases in indirect taxes, which
is regressive when compared to direct
taxation (Muthukumar 2017). While Azad
(p 36) and Kishore (p 245) do address
these questions, a greater interrogation of
these issues would have been welcomed.
While the content of the book is in-
sightful and comprehensive, there are
some issues regarding presentation.
Since most of the graphs are not present-
ed in colour, it becomes hard for the
reader to discern which line refers to
which indicator; this makes it difficult
sometimes to follow the argument.
These issues should not detract from
what is a vital contribution. The contrib-
utors have provided an exhaustive ex-
amination of the state of the Indian econ-
omy and the performance of the current
government. The essays in this volume
provide a valuable context to understand
why the ruling party, that campaigned
extensively on the plank of development
five years ago, has now pivoted to issues
of nationalism and communal polarisa-
tion. This is a volume much needed in
today’s fragile democratic atmosphere.
Rahul Menon (menon.rahul@gmail.com) is with
the School of Livelihoods and Development at
the Tata Institute of Social Sciences, Hyderabad.
REFERENCES
Ghatak, Maitreesh and Udayan Mukherjee (2019):
“The Mirage of Modinomics,” India Forum,
https://www.theindiaforum.in/article/mirage
-modinomics.
Mohanan, P C (2019): “Because Data Is a Public
Good,” Indian Express, 12 February, https://in-
dianexpress.com/article/opinion/columns/be-
cause-data-is-a-public-good-nsc-p-c-mohanan-
employment-survey-5578946/.
Muthukumar, K (2017): “Tax Buoyancy Improves,
Thanks to Indirect Levy,” Hindu Business Line, 8
January, https://www.thehindubusinessline.com
/economy/tax-buoyancy-improves-thanks-to-
indirect-levy/article9466851.ece.
Subramanya, Rupa (2018): “Demonetisation: Is
Data Being Cherry-picked to Show Note Ban
Delivered?,” Financial Express, 14 November,
https://www.financialexpress.com/opinion/
demonetisation-is-data-being-cherry-picked-
to-show-note-ban-delivered/1380960/.
vol lIV no 16 EPW Economic & Political Weekly